Consultant Q&A

Drew

With a BA from Vanderbilt and MBA from Wharton, Drew has spent over 15 years in real estate, including project management, acquisitions and consulting for Hines, JP Morgan, Cerberus and Contrarian Capital. Presently focused on pursuing real estate opportunities in Costa Rica, in his spare time he provides asset management and consulting services to institutional clients seeking assistance acquiring and managing real estate related investments in Costa Rica and the US.

As the SVP at Contrarian Capital Management, LLC, you managed the real estate investments for a $4 billion hedge fund, focusing on the sourcing, evaluating, and executing deals. Which transaction are you most proud of and why?

I am most proud of the purchase at an auction of distressed debt backed by an apartment property in my hometown of Dallas. The combination of highly expert and ultimately accurate debt and property underwriting led to our winning the auction at what turned out to be a fortuitous time. After a rigorous review of the borrower profile and related files we determined a high probability of gaining title to the asset. Furthermore we identified hidden value in the real estate which other national apartment buyers might not see. While downtown Dallas at the time was known for its relatively high office vacancies and limited demand drivers for both apartment and retail product, parking near the central downtown core was extremely valuable due in part to a scarcity factor. The collateral was substantially over-parked, and I believe that identifying this value was an important factor in allowing us to win the deal. After gaining title, a strong opportunity per underwriting turned into a very successful financial deal with subsequent compression in multifamily cap rates and a shift in perception of the submarket.

You focused mainly on off-market and distressed properties. Talk about the intricacies of assessing and sourcing these properties.

An important aspect of working at a real estate firm with limited staff is the efficient utilization of time. Many of these types of deals are time traps. Being able to diligence upfront whether the deal could make sense can save a lot of time and allow firms to focus time and efforts elsewhere. For example a review of public records may show that the capital structure is not conducive to a sale at target pricing. Or a review of the submarket and asset may show that the asset is not a good fit for the submarket. I have seen quite often that distressed "white elephant" assets may turn out to be permanently distressed due to a mismatch of this, and it is important to notice this upfront and move on even though conventional real estate valuation metrics may suggest otherwise. Information on assets is typically scarce with limited transparency, and it is of utmost importance to recreate the needed information through diligent primary market, bottom-up research and information discovery. Doing this swiftly and well can give the buyer an important competitive advantage.

You were formerly a member of the Nashville Stars FC, a semi-professional soccer team. Tell us more.

Soccer means a great deal to me. It is unique in that it will be with me for a lifetime -- first as a player since age 3 and now as a fan who has been to at least one game at every World Cup since 1994. Soccer gave me the opportunity to learn and appreciate different cultures whether by traveling the world as a spectator or as a teammate on the Nashville Stars FC, which had only 2 Americans on its roster when I played. Playing for the Stars I learned that while I probably lacked the athletic talent of most of my peers, I was still able to compete effectively at a high level through hard work and smart play, giving me confidence and determination early on in my career in real estate.

Tell us about a rewarding recent client engagement.

A recent and rewarding experience was assisting a client with an overleveraged asset in Central America. Together we created a plan to generate liquidity largely by taking advantage of the highly attractive debt markets in the US by refinancing a stabilized and underleveraged US asset. The proceeds generated liquidity, granting them more time to develop the business plan for the asset in Central America. This assignment was especially rewarding for me because in helping my client with everything on the US refinancing from the initial term sheet to the final loan agreement, I was able to give a small and relatively inexperienced US real estate owner the same reach, expertise, knowledge, negotiating skills, etc. of the top real estate firms with whom I have worked collectively for over 20 years.

Why did you decide to join StealthForce? What resonated with you?

Joining Stealthforce allows me to pursue my professional passion while also utilizing professional experience gained to date. Launching my boutique real estate business in Costa Rica has allowed me to fulfill my entrepreneurial aspirations. A focus on relatively passive investments and a desire to keep this business small permits flexibility and ample time to help Stealthforce clients. Stealthforce resonated with me because the general idea makes sense. Today's real estate needs are complex and unpredictable, and adding staff/overhead is simply not an option for many companies especially when the need is temporary. Talent on demand addresses this problem, and for me it is highly rewarding to use my professional arsenal to help Stealthforce clients.